SA's land audit makes case for land tax

2018-02-04 06:00
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Black South Africans may constitute 79% of the population but, as individuals, they only directly own 1.2% of the country’s rural land and 7% of formally registered property in towns and cities.

Meanwhile, white South Africans, who constitute 9% of the country’s population, directly own 23.6% of the country’s rural land and 11.4% of land in towns and cities.

This is according to the highly anticipated Land Audit report, which has taken years for the department of rural development and land reform to compile.

The report, dated November 2017, was commissioned by the department. Minister Gugile Nkwinti presented it at the ANC’s Cabinet lekgotla last weekend.

Only 33% of land in South Africa is owned directly by private individuals. Companies, trusts, the state, traditional authorities, churches and community organisations own the rest. The state’s land audit did not establish the racial ownership composition of 67% of land in the country.

The report contains potentially dramatic proposals for financing a new land reform fund, including a “land value tax” on top of municipal property rates, which were instituted in 2004.

The Davis Tax Committee is already meant to produce a report on potential new wealth taxes this year, including the feasibility of a “national tax on the value of property (over and above municipal rates)”.

Nkwinti’s report, however, seems to rely on a 2014 blog post by UK economist Joe Sarling to justify the proposal.

More contentiously, the report appears to call for the nationalisation of land. It recommends that new “national land rights legislation” be introduced that “vests land as the common property of the people of South Africa as a whole”.

It calls for the department “to corporatise its property management portfolio” and learn from the apartheid era Development Trust and Land Act – the law that created the white state’s ownership of land “on behalf” of black people.

MYTHS AND REALITIES

The land audit report does not deal specifically with agricultural land, but rather analyses the country’s entire surface area.

This makes it incomparable to the almost simultaneous report that farmers’ lobby Agri SA released in November last year, to argue that black ownership of farming land has increased significantly since 1994.

Whereas the Agri SA report deals with the 93.5 million hectares of South African land used for farming, Nkwinti’s report deals with all 111 million hectares of rural and semirural land registered as “farms”, as well as the 3 million hectares in towns organised as “erven”.

According to a footnote in Nkwinti’s report, however, the government’s own “comprehensive agricultural land audit is being prepared for publication”.

The report shows that state ownership of land is not as extensive as sometimes claimed. The state owns 20 million ha, compared with 93 million hectares in private hands and, of this, portions are being converted for commercial, residential and industrial use.

An additional 7.7 million hecatres is unregistered trust land in the Eastern Cape and Limpopo, which is also not privately owned.

The report confirms that women own very little land compared with men. Of the land directly owned by individuals, women own 13% and couples 11%.

The findings in the land audit will bolster the ANC’s plans to steam ahead with a resolution taken at its national elective conference in December, to amend the Constitution to expropriate land without compensation. This is an emotive issue that has sparked concerns from many private landowners.

The policy position was adopted after a furious debate at the conference. It became so heated that delegates nearly came to blows and almost collapsed the gathering.

Until the commissioning of the audit, there had been no reliable figures on land ownership in South Africa. The main conclusion of the report is that a new land administration commission must be created to generate data on land ownership.

The report used sources such as the deeds office, municipalities and Stats SA, in what it describes as a very arduous data-gathering exercise. Its numbers are current up to 2015.

“We have just taken the first step upon a long journey towards the goal of a sustainable relationship among South African citizens, through the effective management of land as a resource and nation-building,” the report states.

Curiously, the report classifies as state land the land owned by the Ingonyama Trust, of which King Goodwill Zwelithini is the sole trustee.

This comes on the back of another decision the ANC took at its December conference: to dismantle the Ingonyama Trust Board and transfer the at least 3 million hectares it controls to government, as part of its programme of radical economic transformation.

A high-level panel led by former president Kgalema Motlanthe was the first to propose that the 1994 act that transferred the tribal land to appease the Inkatha Freedom Party (IFP) and convince the Zulu monarch to participate in elections – be amended. This has pitted the ANC against traditional leaders, who have for years supported the party after the IFP lost power in KwaZulu-Natal.

The Zulu king recently warned that “all hell will break loose” if the proposal goes ahead. IFP leader Mangosuthu Buthelezi also raised concerns.

Meanwhile, processes are under way to survey trusts and state land in the Eastern Cape, with the intention of giving it away to communities using existing legislation.

Only 2% of the land in the country is directly in the hands of foreigners.

VARIANCES

The land audit reveals the significant extent to which the land situation differs between provinces – and between rural and urban areas.

When it comes to urban erven, Africans directly own more land than whites in all provinces, except the Northern and Western Cape.

Even then, the proportions are in no way near demographically representative.

In the Northern Cape, whites own an astonishing 69% of erven, by size. In the Western Cape, this figure stands at 49%.

In Eastern Cape, blacks own 21% of urban land – the highest provincial proportion.

With rural land, the completely disproportionate land ownership of white South Africans is far starker, with blacks owning a negligible amount of rural land in all provinces.

TALK TO US

What do you think should be done to accelerate land reform in the country and how should food security be factored in?

SMS us on 35697 using the keyword LAND and tell us what you think. Please include your name and province. SMSes cost R1.50

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